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Keywords

rule against perpetuities, Arkansas law, Arkansas Constitution

Abstract

A drunk driver crashes his Lamborghini into a family sedan, killing the mother and brother and putting the sister in the hospital. The family gets a multi-million-dollar judgement, but they cannot collect––the wealthy drunk driver has no money of his own. All of his money and assets are protected from suit in a spendthrift dynasty trust left behind by his great-great-grandfather. He and his family are members of a new aristocratic class created by the downfall of the rule against perpetuities. The drunk driver first turned to alcohol after his inheritance requirements coerced him into leaving his life behind to attend a faraway school. His parents wanted to protect him from the coercive damage of too much wealth but were powerless to insulate him from the distributions of the dynasty trust––his great-great-grandfather determined all their fates through the eternal grasp of the dead hand.

A perpetuity is “[a]n interest that does not take effect or vest within the period prescribed by law.” Perpetuities can cause a state of legal uncertainty to persist forever, tying up interests based on prior arrangements for all future time. The rule against perpetuities invalidates these interests. Without the rule against perpetuities, even the wealthy class is subjugated to the will of the dead. Descendants may not always make the best decisions, but it is “better for the sovereign and subject that men should be in hazard of having their houses undone by unthrifty posterity, than to be tied to the stake by such perpetuities.” But Thomas Jefferson’s imperative, that “[t]he earth belongs always to the living[,]” is fading away into history. Striving to prevent this dismal future, the framers of the Arkansas Constitution could not have been more forceful when they stated, “[p]erpetuities and monopolies are contrary to the genius of a republic, and shall not be allowed[.]” However, an amendment to the statutory rule against perpetuities in the 2023 legislative session abandons this fundamental principle. Arkansas’s ill-conceived participation in a national race to the bottom fails to benefit Arkansans and worsens inequality in the state. While Arkansas used the uniform ninety-year rule for years, this new rule extends the wait-and-see approach to an unfathomable 365 years. The only justification offered in committee for this arbitrarily long time period is a naked reference to Nevada’s own unconstitutional and undemocratic law. Despite directly conflicting with the Arkansas Constitution, the legislature passed this new Arkansas rule without sufficiently addressing any of its problems. To retain the benefits of the rule against perpetuities and to comply with the Arkansas Constitution, Arkansas should restore the uniform rule.

The rule against perpetuities provides unique protections for our republic that should not be overlooked. One of the best features of the United States, and Arkansas, is that equality of opportunity gives innovators the ability to thrive and share the benefits of their ideas. The rule protects equality of opportunity by preventing the development of hereditary economic classes. Further, the rule safeguards sound decision-making by putting control of property into the hands of people who actually live in the world affected by those decisions. Property already tends to accumulate, even with the rule in place. Without the rule, Arkansas loses one of the few protections it has against the natural development of a hereditary class––something the framers of Arkansas’s constitutional prohibition against perpetuities were explicitly trying to prevent. Arkansas should restore the rule to keep these benefits.

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